5. Acquisitions

2012 Acquisitions

During the nine months ended September 30, 2012 the Company completed acquisitions with an aggregate purchase price of $206.8 million, net of cash acquired, which includes deferred payments of $11.3 million and a contingent earn-out payment of $5.1 million.

Russian Fuel Card Company

On June 15, 2012, the Company acquired all of the outstanding stock of a leading Russian fuel card company. The consideration for the transaction was paid using the Company’s existing cash and credit facilities. In connection with the transaction, a final payment of $11.25 million is due December 15, 2013. This deferred payment is included in notes payable and other obligations, less current portion, within the consolidated balance sheet. The acquired company is the Russian leader in fuel card systems, and serves major oil clients, and hundreds of independent fuel card issuers. Its technology allows issuers to share their retail network, thereby expanding the reach of their networks. Results from the acquired Russian business have been reported in the Company’s International segment since the date of acquisition. The purpose of this acquisition was to further expand the Company’s presence in the Russian fuel card marketplace. This business acquisition was not material to the Company’s consolidated financial statements. The goodwill acquired with this business is not deductible for tax purposes.

CTF Technologies, Inc.

On July 3, 2012, the Company acquired all of the outstanding stock of CTF Technologies, Inc. (“CTF”), a British Columbia organization, for $155.7 million. The consideration for the transaction was paid using the Company’s existing cash and credit facilities. CTF Technologies Do Brasil Ltda and certain of the Company’s other subsidiaries are wholly-owned entities of CTF. The acquisition was carried out pursuant to a plan of arrangement under the Business Corporations Act (British Columbia) and was approved by final order of the Supreme Court of British Columbia. The purpose of the transaction was to establish the Company’s presence in the Brazilian marketplace.

CTF provides fuel payment processing services for over-the-road fleets, ships, mining equipment, and railroads in Brazil. CTF’s payment platform links together fleet operators, banks, and oil companies. CTF earns revenue primarily from a recurring transaction fee paid by the oil companies who purchase services for their fleet customers under multi-year customer contracts. The goodwill acquired with this business is not deductible for tax purposes.

2012 Totals

The following table summarizes the allocation of the purchase price for all acquisitions during 2012 (in thousands):


Trade and other receivables	$	10,852
Prepaid expenses and other		6,167
Property and equipment		8,877
Goodwill		166,288
Other intangible assets		102,658
Notes and other liabilities assumed		(41,598	)
Deferred tax liabilities		(46,481	)

Aggregate purchase prices	$	206,763

The purchase price is net of cash and cash equivalents acquired, totaling $2.1 million, and also includes deferred payments of $11.3 million and a contingent earn-out payment of $5.1 million.

Intangible assets allocated in connection with the purchase price allocations consisted of the following (in thousands):


	Weighted Average Useful Lives (in Years)		Value
Customer relationships		10-20	$	73,884
Trade names and trademarks—indefinite		N/A		14,700
Merchant network		10		6,574
Software		3-10		6,700
Non-compete		2-6		800

			$	102,658

2011 Acquisitions

During 2011, the Company completed two foreign acquisitions with an aggregate purchase price of $333.8 million, net of cash acquired, the largest of which was Allstar Business Solutions Limited.

Allstar Business Solutions Limited

On December 13, 2011, the Company acquired all of the outstanding stock of Allstar Business Solutions Limited (Allstar) in the United Kingdom. The purpose of the transaction was to expand the Company’s European commercial fleet card offerings. The results of Allstar are included in the Company’s consolidated financial statements from the date of the acquisition. The total consideration for this acquisition was £200 million or approximately $312 million, including amounts applied at the closing to the repayment of Allstar’s debt. The consideration for the transaction was paid using the Company’s existing cash and credit facilities.

The following table summarizes the preliminary allocation of the purchase price for Allstar (in thousands):


Trade and other receivables	$	253,628
Prepaid expenses and other		139
Property and equipment		601
Goodwill		106,279
Other intangible assets		168,200
Notes and other liabilities assumed		(176,327	)
Deferred tax liabilities		(40,357	)

Purchase price	$	312,163

Intangible assets allocated in connection with the purchase price allocations consisted of the following (in thousands):


	Weighted Average Useful Lives (in Years)		Value
Customer relationships		10-20	$	141,600
Trade names and trademarks—indefinite		N/A		18,400
Merchant network		10		8,200

			$	168,200

During the nine months ended September 30, 2012, after the December 31, 2011 financial statements were issued, the Company completed a preliminary valuation of tangible and intangible assets and in connection with such valuation considered the report of an independent third party. With this valuation, the Company identified additional intangible assets and deferred tax liabilities acquired as of the acquisition date. Based on the Company’s valuation, the Company has estimated the fair values of the customer-related intangible assets, trade names and trademark assets and merchant network assets acquired as part of the acquisition of Allstar are $141.6 million, $18.4 million and $8.2 million, respectively. As a result, the carrying amount of the customer-related intangible assets, trade names and trademark assets and merchant network assets were increased by an aggregate $86.1 million during the nine months ended September 30, 2012, due to the identification of this information that existed at the acquisition date, with a corresponding decrease to goodwill of $66.3 million and increase to deferred tax liabilities of $19.9 million. In addition, the Company reduced accrued liabilities acquired by $0.7 million, with a corresponding increase to goodwill during the nine months ended September 30, 2012, due to the identification of this information that existed at the acquisition date subsequent to the issuance of the December 31, 2011 financial statements. The Company has recast the December 31, 2011 consolidated balance sheet to reflect these purchase accounting adjustments. Due to the acquisition of the Allstar business occurring during December 2011, the preliminary purchase accounting adjustments recorded during the nine months ended September 30, 2012 did not have a significant impact on the consolidated income statement or consolidated statement of cash flows, thus the Company has not recast these statements.

The allocation of purchase price is preliminary for the Allstar acquisition as the Company has not yet finalized the valuation of assets acquired and liabilities assumed. Goodwill recognized is comprised primarily of expected synergies from combining the operations of the Company and Allstar. The goodwill acquired with this business is not deductible for tax purposes.